Supply Chain Resiliency: Navigating the “New Normal”

Just over two years after the outset of the COVID-19 pandemic, the electronic components supply chain is settling into a “new normal” rhythm, coping with COVID-19 variants, high customer demand, shipping snarls and tight supply.

New disruptions like COVID lockdowns, extreme weather events and armed conflicts continue to cause global ripple effects, but as a whole, the supply chain has been incredibly resilient. Various stakeholders have been able to address these issues with practiced flexibility, increased investments and a sense of understanding.

David Stein, vice president of global supplier management, Digi-Key Electronics

So where are things today? In some areas, the picture looks pretty similar to how it’s been for the past couple years, but there have been meaningful shifts in other areas as the industry adapts to this “new normal” and prepares for the future.

Demand stretches lead times

Demand is still exceptionally high across all industries and verticals, so lead times are stretched in all product categories. Today, the reason for product shortages is primarily related to demand and manufacturing capacity rather than supply chain issues, however, it is important to continue to keep an eye on supply chain issues as these will continue to pop up in different regions of the world.

While keeping inventory in stock is still a challenge, Digi-Key’s inventory levels are growing month-over-month. In March 2022, we received the most product that we have ever received in the history of the company and Q1 2022 was the highest receiving quarter we’ve ever had, so we are making meaningful progress on continuously increasing our inventory.

Digital solutions enhance procurement

Because things change so quickly these days, it is critically important to leverage digital solutions that can provide real-time information. Digi-Key offers three major digital solutions: EDI, APIs and Punchouts, which are all designed to make a digital connection between Digi-Key’s system and your organization for streamlined quotes, detailed purchase orders, search, price and availability, and more. The easiest way to get started with digital solutions is by setting up an automated quoting process. A quoting process alone represents a major timesaver.

Communication remains the key

The Digi-Key team excels at staying in close contact with our supplier partners to give them as much visibility as possible into the products that are in highest demand, and in some cases, we’re already placing orders as far out as mid-to-late 2023 to ensure that our inventory is pipelined accordingly.

We’re also investing in technologies that help connect us more automatically and electronically with our suppliers, such as Advance Shipping Notifications which provide real-time, automated updates to the Digi-Key system about when product will be shipping. This provides the most up-to-date information from our supplier partners to our customers.

We will continue to meet new challenges with innovations and investments that enable our customers to meet the requirements of today while planning for a better tomorrow.